New products and services linked to Global Navigation Satellite Systems are expected to grow significantly in the coming years, providing opportunities and critical access to technology for Europe’s economy.
However, up to € 42 billion in investment is needed in the next 10 years if Europe is to stay competitive.
The EU Agency for the Space Programme (EUSPA) and the European Investment Bank (EIB) have published the GNSS Investment Report today. The report provides a comprehensive investment analysis of the global navigation satellite systems (GNSS) market, examining and forecasting the dynamics of the sector overall. It also outlines the current state of play regarding available public and private funding and identifies needs and funding gaps for GNSS companies and startups in the European Union.
The report finds that Europe still holds a strong position in the global landscape of downstream GNSS solutions — products and services linked to navigation satellites. However, up to €42 billion in public and private investment will be needed over the next ten years if Europe is to stay competitive and remain in a position where it can rely on domestic suppliers.
“Satellite navigation applications and services are strategic assets. They provide the future foundations for a competitive European transport and agriculture sector and help to address climate change risks,” said EIB Vice-President Kris Peeters. “European companies need to be at the forefront of these technologies. If we don’t want to depend on foreign big tech to meet our demands, we need to address funding gaps for space in the European Union. As a cornerstone investor in Europe’s innovation ecosystem, the EIB stands ready, together with its partners, to mobilise the private and public resources we need to remain competitive.”
“Our mission at EUSPA is to foster the development of a competitive sector that transforms data and services from space into concrete benefits to users. This report is one important element to ensure that Europe stays ahead of GNSS market trends by seeking more financing opportunities and developing strategic oversight,” said EUSPA Executive Director Rodrigo da Costa. “Designing fit-for-purpose actions and financial instruments will be crucial to ensuring that good ideas transform into innovative businesses, supporting Europe’s capacity for innovation across all GNSS sectors, including our competitiveness in the rapidly growing sectors of autonomous transport, precision agriculture, secure infrastructure, environmental monitoring and security-related technologies and services.”
The GNSS Investment Report shows that with market share of approximately 25%, Europe currently enjoys a strong position within the global GNSS downstream market — a market that is expected to see revenues reach €220 billion this year and up to €510 billion by 2032. Already today, consolidation has become a key characteristic of the market, as has the creation of global leaders with significant market share.
In 2019, 71% of all worldwide funding for space companies came from venture capital and private equity companies. While the first group tends to invest at relatively early stages of a company’s development, private equity investors are more risk-averse and require predictable revenues, making it difficult for early-stage companies to secure funding for their expansion from these investors. In the near future, the share of venture capital and private equity investments is expected to increase.
Several European companies are global leaders in their sectors, including the manufacturing of GNSS components, receivers for road and maritime applications, and agriculture. But in fast-growing areas such as consumer solutions and drones, European companies are under-represented. According to the report, this situation, combined with increased competition across the board from the downstream GNSS market, could chip away at Europe’s market share and future competitiveness.
Further key findings of the report include:
Europe benefits from increased funding such as the CASSINI initiative (up to €1 billion in funding) and the forthcoming InvestEU fund (total funding envelope of €26 billion).
Europe lags behind other global players in terms of private funds invested worldwide in space startups between 2015 and 2020 (the United States accounted for 67% of all private investment in 2020).
European GNSS-specific R&D expenditure is lagging behind North American and Asian-Pacific companies. Catching up would require the European Union to invest between €34.1 billion and €42.7 billion in GNSS R&D over the next ten years.
The report provides recommendations on supporting future EU competitiveness in the GNSS downstream market. These recommendations include the need to mobilise significant investment envelopes through tailored instruments, supported by technical capacity-building activities for fund managers. Moreover, the report recommends support for the adoption of GNSS solutions in other sectors of the economy and ongoing monitoring of the GNSS market, with a special focus on identifying European rising stars.
The GNSS Investment Report follows a 2019 memorandum of understanding between EUSPA and the EIB. Through the memorandum, the two organisations jointly seek to promote R&D investments and pilots within the GNSS market and to encourage the mobilisation of GNSS funding.
European Investment Bank Group
The EIB is one of Europe’s largest financiers of innovation and venture capital. In 2021, a record €20.7 billion of the EIB Group’s financing went towards supporting innovation, including investment in digitalisation and space technologies, as well as promoting skills and training for the digital world.
European Union Agency for the Space Programme (EUSPA)
The European Union Agency for the Space Programme (EUSPA) provides safe and secure European satellite navigation services, promotes the commercialisation of Galileo, EGNOS and Copernicus data and services, and coordinates the European Union’s forthcoming governmental satellite communications programme GOVSATCOM. EUSPA is responsible for the security accreditation of all the EU space programme components. By fostering the development of an innovative and competitive space sector and engaging with the entire EU space community, EUSPA contributes to the European Green Deal and digital transition, the safety and security of the European Union and its citizens, and the strengthening of the European Union’s autonomy and resilience.
EIB Vice-President Ambroise Fayolle and Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs Elżbieta Bieńkowska took the opportunity of the 11th Conference on European Space Policy to present a new report on “The future of the European space sector”. The report, produced by the joint European Commission–EIB initiatives InnovFin Advisory and European Investment Advisory Hub, established under Horizon 2020 and the Investment Plan for Europe respectively, assesses the current investment landscape in the space industry, identifies gaps in financing and proposes key recommendations and solutions to improve the existing conditions.
Today, the EIB and the European Global Navigation Satellite Systems Agency signed an agreement to cooperate on supporting investment in the European space-based service economy. The signature took place in Prague during the celebration to mark the 15th anniversary of GSA.
The European Investment Bank (EIB) as the long-term lending institution of the European Union, and GomSpace, an innovative Danish space company, has announced a venture debt financing agreement of up to EUR 18 million. The EIB is a key financier of new space technologies in the European Union, including recent combined EUR 45 million financings into “new space” leaders such as Spire Global, D-Orbit and EnduroSat. Now, the EIB is again supporting space “deep tech” with a venture loan to GomSpace, a Danish space company and pioneer in the global market for nano-satellites, platforms, systems, and space missions. The project concerns research and development for an enlarged platform, including streamlined subsystems for their entire product range. For payloads, the focus is on high frequency applications, which are crucial for the telecom sector.